• TVET-TRAINING PROGRAMME

PROVISIONS : - For all Level I & Level II

Trainees
• MODULE TITLE: - Entrepreneurship for
employability - I
• MODULE STATUS : - Common
• MODULE CODE: - TCEE-I (TVET, Common
Course, Entrepreneurship for Employability –I)
Developing Entrepreneurship and Employability
skills
Basic Concepts of Entrepreneurship
1.1.1 Entrepreneurship
• ―Entrepreneurship‖ is derived from the French verb
entrepreneur which means ―to undertake‖.
• The concept entrepreneurship refers ―The process of
identifying opportunities in the market place,
arranging the resources required for pursuing these
opportunities and investing the resources to exploit
the opportunities for long term gains. It involves
creating wealth by bringing together resources in
new ways to start and operate an enterprise.‖
Elements (steps in the implementation) of
Entrepreneurship
1. Observing the environment/identifying gaps,
2. Identifying opportunities,
3. Gathering the necessary resources
4. Implementing the activity and
5. Receiving rewards for engaging in the activity
Entrepreneurial Functions in Business
1. Identify gaps in the market and turn these gaps into
business opportunities.
2. Finances and mobilizes resources for the business
3. Organize and manage the business.
4. Bear /tolerate/ the uncertainties and risks of the
business.
5. Encourage competition
6. Self-employed and applying entrepreneurship
Economic Principles of Entrepreneurship
1. Works best in an open market economy
2. Promotes private enterprise
3. Adds value to products and services (creates wealth)
4. Providing needed products/service
5. Developing new markets
Rewards for Being an Entrepreneur
1. Self-actualization /personal fulfillment
2. Feeling of freedom and independence
3. Providing jobs and benefits to others (investors,
suppliers, bankers, subcontractors, work force, and
customers)
4. Economic goods (product/service, incomes for
workers, profits for shareholders/partners)
Importance of entrepreneurship
The followings are the major benefits of
entrepreneurship
1. Employment creation
2. Local resource utilization
3. Decentralization and diversification of business
4. Promotion of technology
5. Capital formation
6. Promotion of an entrepreneurial culture
• Meaning of Entrepreneur
• Entrepreneurs are individuals who undertake an
economic activity.
• On one extreme, an entrepreneur is a person who brings
change, possessing characteristics found in only a very
small fraction of the population.
• On the other extreme of definition, anyone who wants
to work for him/her is considered to be an entrepreneur.
• Types of entrepreneurs
Generally, there are four types of entrepreneurs as
indicated here under:
1. Personal achiever
2. Super-salesperson
3. Real manager
4. Expert Idea Generator
Personal achiever
• Personal achievers are the classic entrepreneurs. They
are the types of people that we picture when the
term “entrepreneur” is used. They are the only types
who must become entrepreneurs to succeed in life. If
they are placed in a non-entrepreneurial environment,
they stand a good chance of failure.
They possess seven characteristics that relate to
entrepreneurial success:
• Need for high achievement
• Need for performance feedback
• Desire to plan and set goals
• Strong individual initiative
• Strong personal commitment
• Internal locus of control
Super-salesperson
• Generally, onlookers don’t view super sales people as
having the potential for entrepreneurial success. Their
entrepreneurial strength is their approach to selling.
They truly cater to the needs of clients and customers,
thus placing a strong stress on service.
Super sales people are interested in managing the
customer into a sale, not in applying pressure tactics.
• Capacity to empathize
• Social interaction and relationships are important
• Need to have strong positive relationships with others
• Sales force is critical
• Background: less education, more experience
• Real manager
Real managers exhibit some of the traits of established entrepreneurs and
some of the abilities of corporate managers. They possess the following
traits
• Desire to be corporate leader
• Desire to compete
• Decisive
• Desire of power
• Desire to stand out in a crowd
Expert Idea Generator
• Expert idea generators are people who have ideas for a business that can
provide a real competitive advantage. They become tremendously
enthused about their ideas and spend a great deal of time implementing
them.
They possess a majority of the following five characteristics:
• Desire to innovate
• Love of ideas, curious
• Belief that new products are crucial
• Intelligence is the competitive advantage
• Desire to avoid taking risks
Personal efforts to be an Entrepreneur
The nature of entrepreneurial activity requires the
following extra efforts from an entrepreneur
1. Works long hours
2. Always concerned about the business
3. Needs high energy
4. Sacrifices other important aspects of life
5. Limited social life
6. Not much time with family and friends
7. Financial investment
Entrepreneur and Intrapreneur
• Entrepreneurs are individuals who notice opportunities and take
initiative to mobilize resources; however they work in large
companies and contribute to the innovation of the firm.
• Intrapreneurs often become entrepreneurs.
Entrepreneur and manager
• A manager is a person who plans, organizes, directs
and controls the activities of an established business.
• It is the manager who leads the business to its
targets and who is responsible for the business's
success or failure.
• The entrepreneur is the person who makes
judgmental decisions under conditions of
uncertainty and who creatively turns the uncertainty
into an advantage for the business she/he runs.
• A manager is an employed person while an
entrepreneur manages the enterprise for his/her
personal gain.
 Point of
. Distinction
Entrepreneur Manager
He starts a venture by setting up a The main aim of a manager is to
Goal
new enterprise for his personal render his/her service in an enterprise
Management
satisfaction. already set up by someone.

Entrepreneur is the owner/founder of A manager is a servant in the

Status
the enterprise. enterprise.

An entrepreneur bears all risk and A manager does not bear any risk
Risk
uncertainty involved in the enterprise. involved in the enterprise.

Entrepreneurs for his/her risk bearing A manager receives salary as a

role he/she receives profits. The reward for services rendered which is
Rewards
reward is not only uncertain and fixed and regular. It can never be
irregular but can at time be negative. negative.

As an innovator s/he is called as

A manager executes the plans of the
change agent who introduces goods
Innovation entrepreneurs/owners/founders of the
and services to meet changing needs
business.
of the customer.
Enterprise and Enterprising
Enterprise means always finding a way to keep yourself actively
working towards your ambition. Enterprise is two things. These
are:
• Creativity
• The courage to be effective
Meaning of Enterprising
• An enterprising person is one who sees opportunity in all areas
of life.
• To be enterprising is to keep your eyes open and your mind
active. It’s to be skilled, confident, creative and disciplined to
seize opportunities that present them regardless of the economy.
Enterprising people always see the future in the present.
Enterprising people always find a way to take advantage of a
situation, not be burdened by it.
Enterprising people aren’t lazy. They don’t wait for opportunities
to come to them, they go after the opportunities.
Enterprising men and women exhibit the following
characteristics
 E: Energy
 N: Need to achieve
 T: Task oriented
 E: Empathy
 R: Resourcefulness
 P: Planning
 R: Risk-taking
 I: Innovation
 S: Skills
 I: Independence
 N: Networking
 G: Goal oriented
Practically all undertakings can be referred to as
enterprising if they fulfill the followings.
1. Idea identification
2. Planning
3. Implementation,
4. Successful completion of an activity and
5. Receiving the rewards.
Entrepreneurship helps to effectively utilize all
the economic resources.
Entrepreneurship plays a key role in enhancing an
economy in terms of the following:
Creating jobs and additional wealth creation
Promoting free enterprise and healthy competition
Spreading prosperity and promoting economic
growth
Ensuring innovation and creativity
Encouraging grassroots development
Improving social and community conditions
Shifting the mind set of being employed to self-
employment.
Developments of Entrepreneurial mindset
• Overview of mindset
• “Success and failure begins in your mind and it starts today.‖
Robert van der Wolk
• A mindset is the sum of your knowledge, including beliefs and
thoughts about the world and yourself in it. It is your filter for
information you get in and put out. So it determines how you
receive and react to information. Mindset can be:
1. fixed or
2. growth oriented.
• While a fixed mindset assumes your talents and abilities are
set
• the growth mindset believes your talents and abilities can be
developed. It is pointed out that a mindset can change. Much
of this occurs through developing a greater awareness of your
current mindset, and taking steps to purposely start thinking
and reacting in new ways.
 Entrepreneurial mindset
• An entrepreneurial mindset is a set of beliefs, thought processes, and
ways of viewing the world that drives entrepreneurial behavior.
• The mindset of successful entrepreneurs is different from mindset of
traditional workers in many ways.
• A positive mindset helps motivate entrepreneurs to focus on desired
activities and events and the results they hope to achieve.
The characteristics of the entrepreneurial mindset which are common for
all entrepreneurs are:
1. They passionately seek new opportunities.
2. They pursue opportunities with enormous discipline.
3. They pursue only the very best opportunities and avoid exhausting
themselves and their organizations by chasing after every option.
4. They focus on execution specifically, adaptive execution.
5. They engage the energies of everyone in their domain.
The factors that help entrepreneurs to develop a
positive mindset include:
 Focus on opportunities to learn from each experience.
 Being involved in positive activities.
 Choose work objectives that are achievable and have an
impact.
 Make friends with other entrepreneurs.
 Acquire the thinking, mannerisms, and characteristics
of successful entrepreneurs.
 Have successful entrepreneurs serve as role models and
mentors.
 Avoid negative thoughts and ideas.
 Take advantage of opportunities to improve your
situation, whether it is your personal life, work life or
life in the community.
 Successful entrepreneurs need to develop a positive
mindset and observe their environment. In order to do
this, the process described below in sequential order
should be followed;
Attention (focus on something)
Retention (what observed must be retained)
Reproduction (behavior must be practiced again
and again)
Motivation (learner must be motivated to learn
from it)
personal life, work life or life in the community.
• Essential Entrepreneurial Mindset Characteristics.
Entrepreneurs Are:
• Independent:
• Responsible:
• Abundant:
• Goal-Oriented:
• Not Afraid of Failure
• Growth-Oriented
• Feedback-Seeking:
• Learning-Oriented:
• Forward-Thinking
• Self-Accepting
• Self-Aware:
• Collaborative:
• Comfortable with Discomfort:
• Adaptable:
• Problem-Solving:
• Driven and Tenacious
• Focused:
• Action-Oriented:
• Decisive:
Developing Positive mindset towards work
• ―Whether you think you can or think you can’t,
you’re right‖
• ―The best and most beautiful things in the world
can’t be seen or touched ... but are felt in the
heart.‖
Helen Keller - was a blind and deaf author and
lecturer
• ―If you’re not aiming for success, than you’re
either aiming for failure or not aiming at all‖
• Positive thinking means seeing opportunity where
negative thinking means looking at what is missing
or what is wrong
• The following are some tips for how you can develop
a more positive mindset at work in general and
entrepreneurship in particular; no matter how
dissatisfied you may feel in your current position.
Pay attention to what you’re telling yourself
throughout the day
Look for other points of view.
Be sure to take breaks
Try out some new communication strategies at work
Your home should be a place in which you can safely
leave behind the daily stresses of your job.
Improve your life outside of work.
Explore your options
Design long-term goals.
• Developing effective work habit (Culture)
• Work habits refer to a person’s characteristic approach
to work, including such things as organization; priority
setting, and handling of paperwork and e-mail. Some
people have great work habits
In order to develop effective work habits and became
more productive person, things that should be considered
include
1. Overcoming procrastination
2. Developing attitudes and values that foster
productivity.
3. Developing skills and techniques that lead to personal
productivity.
4. Overcoming time wasters.
 Understanding Entrepreneurial Competencies &
Environment
Identifying Personal Entrepreneurial competencies (PECs)
• Competencies: are defined as a body of knowledge, a set of
skills and a cluster of traits.
• Knowledge: consists of a set or body of information stored,
which may be recalled at an appropriate time.
• Skill: is the ability to apply knowledge.
• Trait: is the total of peculiar qualities or characteristics that
constitutes personal individuality.
• Entrepreneurial competencies: refer to the key
characteristics that should be possessed by successful
entrepreneurs in order to perform entrepreneurial functions
effectively.
Levels of competencies required by entrepreneurs
• There are three levels of competencies, which all
entrepreneurs need:
1. Personal competencies: creativity, determination,
integrity, persistence, emotional balance and self-
criticism.
2. Interpersonal competencies: communication,
engagement, delegation, respect.
3. Business competencies: business vision, resource
management, networking, negotiating skills.
No Personal Entrepreneurial Competency Cluster

1 Opportunity seeking and initiative

2 Persistence

3 Fulfilling commitments Achievement

4 Demand for efficiency and quality

5 Taking calculated risks

6 Goal setting

7 Information seeking Planning

8 Systematic planning and monitoring

9 Persuasion and networking

Power
10 Independence and self-confidence
Understanding Entrepreneurship and Environment
• Business environment refers to the factors external to a
business enterprise which influence its operations and
determine its effectiveness. Business environment may be
healthy or unhealthy.
• Healthy business environment means the conditions are
favorable to the growth of business.
• Unhealthy environment implies conditions hostile or
unfavorable to business operations.
• Classification of Business Environment
• Business environment may be classified into two broad
categories; namely: external; and internal environment
• External Environment
• It is the environment which is external to the business and
hard to influence independently.
• The following are the components of external environment:
1. Economic Environment
• Economic environment is of multidimensional in
nature. It consists of:
1. the structure of the economy,
2. the industrial, agricultural, trade and transport
policies of the country,
3. the growth and pattern of national income and its
distribution,
4. the conditions prevailing in industrial, agricultural
and other sectors, t
5. he position relating to balance of trade and balance
of payments, and
6. other miscellaneous conditions of the economy.
2.Legal Environ ment
3.Political Environ ment
4.Socio-Cultural Environ ment
5.Demographic Environ ment
Internal Environment
• Internal environment is the environment which is under the
control of a given organization.
• Following are the components of internal
environment of a business:
1. Raw Material:
2. Production/Operation:
3. Finance:
4. Human Resource:
Identifying Environmental Factors Affecting Entrepreneurship
• A complex and varying combination of financial, institutional,
cultural and personality factors determines the nature and degree
of entrepreneurial activity at any time. The following are some
of the environmental factors which hinder/delay entrepreneurial
growth:
1. Sudden changes in Government policy.
2. Outbreak of war or regional conflicts.
3. Political instability or hostile Government attitude towards
industry.
4. Excessive red-tapism and corruption among Government
agencies.
5. Ideological and social conflicts.
6. Unreliable supply of power, materials, finance, labor and other
inputs.
7. Rise in the cost of inputs.
8. Unfavorable market fluctuations.
9. Non-cooperative attitude of banks and financial institutions.
Entrepreneurial motivation and Decision
Generally, motivation is the set of forces that cause people to do
something. It is an inner state that energizes and directs behavior toward
goals. So, motivation is the set of intangible forces that stimulate
someone to take a desired course of action.
Internal Factors:
Among many internal factors motivating entrepreneurs;
1. Desire to do something new.
2. Become independent.
3. Achieve what one wants to have in life.
4. Be recognized for one’s contribution.
5. One’s educational background.
6. One’s occupational background and experience in the relevant field.
External Factors:
1. Government assistance and support.
2. Availability of labor and raw material.
3. Encouragement from big business houses.
4. Promising demand for the product
Entrepreneurial Decision
• As an entrepreneur, you must make different types of decisions on
the everyday basis. You must choose directions. Also, you must
solve problems.
Decision-Making Process
• Decision-making process is one of the most critical processes in
your business. You can see different types of this process in reality,
but generally, they all have the same purpose effective and efficient
decision that will bring results to your business.
• The most common used approaching in the decision-making
process is according the following steps:
1. Recognize the problem/the gap
2. Analyze the problem
3. Define possible solutions
4. Analyze all possible solutions
5. Select the best solution for the application
6. Implement the decision
 Business Ideas, opportunities and feasibility
study
Definition of business ideas
• A business idea is a short and precise description of the
basic operation of an intended business. Before you
start a business, you need to have a clear idea of the sort
of business you want to run.
• A good business idea will be compatible with the
sustainable use of natural resources and will protect the
social and natural environment on which it depends.
• A good business idea is essential for starting a
successful venture and to stay ahead of competition in
the market.
• Finding a good business idea is the first step in
transforming the entrepreneur’s desire and creativity
into a business opportunity. Good business ideas,
however, do not usually just occur to an entrepreneur.
 Generating and Screening business ideas
Sources of Business Idea
The followings are some of the sources from which business
ideas are generated
 Mass Media (newspapers, magazines, TV, Internet)
Hobbies/Personal Interest
 Personal Skills and Experience
 Business Exhibitions
 Surveys
 Customer Complaints
 Natural scarcities and pollution
 Changes in Society
 Brainstorming
 Being Creative
 Some tips to generate a successful business idea
 Start thinking! Get your brain to work
Buy a note book
Follow your passion
Keep your eyes open
Capitalize on your strengths
Explore new things
Check your bank account
Know what you want in life
Choose a business that suits your personality
Read about other people that started their own
business
Steps in generating and screening the best viable
business idea
• Out of the business ideas generated through brainstorming, the best
business idea can be screen out using the following steps:
• Step 1: Brain Storming
• Step 2: Macro Screening
• Step 3: Micro Screening
• Step 4: SWOT analysis

•
 the viability of the business idea is checked
according to the following criteria:
Marketing Viability
Technical Viability
Organizational and Management Viability
Financial Viability
Environmental Viability
Ecological Viability
Availability of raw materials &other inputs
Ease of implementation
Consistency with government priorities
• Reasons for generating business ideas
• There are many reasons why entrepreneurs or would-be entrepreneurs
need to generate business ideas. Here are just a few:
 You need a great idea to start a new business
 Business ideas need to respond to market needs
 Business ideas need to respond to changing consumer wants and
needs
 Business ideas help entrepreneurs to stay ahead of the competition.
 Business ideas are needed to exploit technology and do things better
 Business ideas are needed because the life cycles of products are
limited.
 Business ideas help to ensure that businesses operate effectively and
efficiently.
 Business ideas help to solve natural resource scarcity, pollution and
depletion.
 Business opportunities
Understanding Business Opportunity
• A business opportunity is an attractive investment idea or
proposition that provides the possibility of a return for the
person taking the risk.
• Such opportunities are represented by customer
requirements and lead to the provision of a product or
service which creates or adds value for its buyer or end-user.
• In other words, a business opportunity is a business idea that
has been researched upon, refined and packaged into a
promising venture that is ready to launch.
• Multiple business ideas may be generated on a daily basis
but only few of them will be profitable in the long run based
on market research and feasibility study conducted.
• An opportunity, in order to be a business
opportunity, must fulfill the following criteria:
 There should be a real demand
 Return on investment
 Availability of resources and skills
 Meet objectives
 Be competitive
 It must have a high level of gross profit margins
 It must have the potential to start generating profit within 12 months –
36 months
 The startup capital investments must be realistic and within the range
of what an entrepreneur can provide.
 It must have the potential to keep on improving with time
 It must have a low level of liability to risk
• Identifying and Assessing Business Opportunities
• Ideas and opportunities need to be screened and assessed for
viability once they have been identified or generated.
Identifying and assessing business opportunities involves
determining risks and rewards/returns reflecting the
following factors:
 Market
 Length of the ―window of opportunity‖
 Personal goals and competencies of the entrepreneur
 Management team
 Competition
 Capital, technology and other resource requirements
 Environment
 Feasibility study/analysis
Meaning of a feasibility study/analysis
• Feasibility study/analysis is the process of determining if a
business idea is viable. As a preliminary evaluation of a
business idea, a feasibility analysis is completed to
determining if an idea is worth pursuing and to screen ideas
before spending resources on them.
• A feasibility study precedes a business plan. Before writing
a business plan, one needs to identify how, where, and to
whom they intend to sell a service or product. One also
needs to assess the competition and to figure out how much
money they need to start the business and to keep it running
until it is established where all of these are achieved through
a feasibility study.
• Benefits of a feasibility study/analysis
The followings are the major benefits of any
feasibility study/analysis
It enables to identify problems that may encounter
the business and their solutions;
It enables someone to develop marketing strategies
to convince a bank or investor that your business is
worth considering as an investment;
It serves as a solid foundation for developing a
business plan
It enables someone to know what customers want,
test a product's usability and the quality of the user's
experience
 Components of a feasibility study/analysis
• The components of a feasibility study/analysis
include all the things that should be considered in
conducting a feasibility study/analysis.
• Starting an Enterprise
• Enterprise and Enterprising
Definition of Enterprise and Enterprising
• An enterprise is a business-oriented organization formed specifically
so founders can pursue entrepreneurial endeavors for a profit. While
enterprises have social elements, they are different from clubs or other
non-commercial organizations because of their entrepreneurial
purposes.
• The first step in organizing is to identify and enumerate the activities
required to achieve the objectives of the enterprise.
• An enterprise is for the purpose of attracting customers, selling goods
and services and earning profit. Enterprises are either formal or
informal.
• The term enterprise is more commonly used in reference to informal
entrepreneurial activities. An enterprise is considered to be any entity
engaged in an economic activity, irrespective of its legal form.
• Concept of enterprising
• By understanding the enterprising concept, one can
appreciate that all people have the potential to be
enterprising. Enterprising men and women are able to deal
positively with the challenges and problems they face in
their daily lives.
• Practically all undertakings can be referred to as
enterprising it fulfills the followings.
1. Idea identification,
2. Planning,
3. Implementation,
4. Successful completion of an activity and
5. Receiving the rewards.
• Concept of enterprising
• By understanding the enterprising concept, one can
appreciate that all people have the potential to be
enterprising. Enterprising men and women are able to deal
positively with the challenges and problems they face in
their daily lives.
• Practically all undertakings can be referred to as
enterprising it fulfills the followings.
1. Idea identification,
2. Planning,
3. Implementation,
4. Successful completion of an activity and
5. Receiving the rewards.
1. Based on the nature and function of Business of
operation
• Service giving enterprise: - Business enterprises that render
service to customers.
• Merchandise enterprise: - an enterprise that purchases goods
for resale in normal operation of the businesses.
• Manufacturing enterprise: - is purchases raw materials and
different components and
convert it into end products.
2. Based on the size/scale of the operation
 Micro enterprise
 Small enterprise
 Medium enterprise
 Large enterprise
Based on the nature of ownership
 Proprietorship
 Partnership
 Joint stock company (Share Company)
 Corporation
Legal forms of business enterprises
• The entrepreneur has to be sure of the administrative and legal issues
involved in the business project which is going to be selected. Before
a legal form is selected, however, several factors must be considered,
not the least of which are legal and tax options.
A. The sole proprietorship has only one owner.
B. A partnership has two or more co-owners.
C. A limited company is an association of stockholders or owners
chartered by the government. It has the authority to transact business in
same manner as one person.
D. A cooperative is a group of people operating a business through a
1. Sole proprietorship/Sole trader
• A sole proprietorship is a business that is owned and operated by one
person. The enterprise has no existence apart from its owner
Partnership
• It is formed through an agreement among two or more persons to
carry on jointly a legalized business as co-owners.
• Like the sole proprietorship, it is not a separate legal entity from its
owners.
• Classification of partnership
Based on the organization characteristics partnership form of business
organization is classified in to two:
General partnership: A partnership in which all partners have mutual
agency and unlimited liability for partnership debt.
• .
• Limited partnership: A partnership that has two classes of partners:
• a) Limited partners
• b) General partners
• a) Limited partners: A partners who have no personal liability for
debts of partnership beyond the amount they have invested in the
partnership.
• b) General partner: a partner who assume unlimited liability for the
debt of the partnership. Hence, general partner in the limited
partnership are responsible for its management.
. Share Company (Corporation)
• It is an association of stockholders that has been established to allow a
group of entrepreneurs to act as one.
• The officials of the share company must file a special document,
called the Articles of Incorporation/Charter.
• Cooperative
• It is a group of ten or more people operating a business through a
jointly owned and democratically run organization.
• The cost of registering a cooperative is usually lower than the cost for
registering a share company. A written cooperative agreement is
required and must be filed with the appropriate government
authorities. The management of a cooperative is elected by the
members of the cooperative.
Principle of Cooperative
• Registered and have limited liability for its members
• Members have an equal vote in decisions
• Membership is open to everyone who fulfils specified conditions
• Assets controlled and usually owned jointly by members
• Profit shared equally b/n members with limited interest payable on
loans made by members
• Share capital remains at its original value
 Micro and Small Enterprises in Ethiopia
Facts of Micro and Small Enterprises in Ethiopia
• Small and medium enterprises (SMEs) cover a wider spectrum of
industries and play an important role in both developed and
developing economies.
• MSEs are the natural home of Entrepreneurship. The sector is also an
important force to stimulate economic development by:
1. Generate employment , Equitable income distribution , Activate
competition
2. Exploit niche markets , Enhance productivity and technical change
 Size Based Classifications of Enterprises
Level of No. of Total Asset in Total Asset in
Economic Sector
Enterprise Employees ETB USD
Industry < 10 employees < 250,000 <7,500
Micro Service &
< 10 employees < 200,000 < 6,000
Agriculture
11 – 50 250,001 – 4
Industry 7,500 – 115,000
employees Million
Small
Service & 11 – 50 200,001 – 2.5
6,000 – 75,000
Agriculture employees Million
51- 100 4,000,001 - 45 115,000 – 1.5
Industry
employees Million Million
Medium
Service & 51- 100 3,000,001 - 25 75,000 –
Agriculture employees Million 750,000
Industry >100 employees >50 Million > 1.5 million
Large Service &
>100 employees >25 Million > 750,000
Agriculture
Economic social & political contributions of
small business enterprise
Small and medium enterprises (SMEs) cover a wider
spectrum of industries and play an important role in both
developed and developing economies.
Some of the contributions (SMEs)
1. Equitable distribution of wealth and decentralization of
economic power
2. More Employment creation capacity
3. Removing Regional Imbalance
4. Ancillary Function - (supply parts and accessories to
bigger enterprises)
5. Export Promotion
Characteristic and role of small business
• Characteristics of Micro and Small Scale Industries .
The following are some of the important characteristics of
small scale industrial sector/unit.
• 1) Closely held
• 2) Personal Character
• 3) Limited scale of operation
• 4) Indigenous resources
• 5) Labour intensive
• 6) Local area of Operation
• 7) Simple Organization
Why are Micro and Small Enterprises Important to the Economy?
According to ILO (2003), MSEs are pulling economic and
employment growth worldwide.
 They can spark off socio-economic revival, as they need little
small capital to operate, but can contribute much
 They use minimum, simple, and inexpensive equipment and inputs
 They often available locally, use limited space, operate with basic
technical and management skills., adapt swiftly, (quickly , rapidly ,
fast ), repair or replace infrastructure and equipment
 They produce basic tools for Agriculture, manufacturing, and
Construction
 They fabricate basic goods and services needed by societies
 They create quickly self-employment and jobs
 Too many eggs in one basket(no expansion or product
diversification)
 Greater flexibility, Less bureaucracy
• Basic Concepts of Marketing
• Marketing is too often confused with selling. Today, marketing
must be understood not in the old sense of making a sale—
―telling and selling‖—but in the new sense of satisfying
customer needs. ―
• Selling is the art of finding clever ways to dispose of what you
make. It focuses on creating sales transactions rather than on
building long-term, profitable customer relationships.
• Marketing is the art of creating genuine customer value. It is the
art of helping your customers become better off.
• marketing is defined, as social and managerial process by which
individuals and organizations obtain what they need and want
through creating and exchanging value with others.
Marketing answers the following questions:
• Who are your customers?
• What are my customer’s needs and wants?
• Understanding the Market place and Customer Needs -
• Customer Needs, Wants, and Demands
• Need: Human needs are states of felt deprivation. They
include basic physical needs for food, clothing, warmth, and
safety; social needs for belonging and affection; and
individual needs for knowledge and self-expression.
Marketers did not create these needs; they are a basic part of
the human makeup.
• Wants: wants are the form human needs take as they are
shaped by culture and individual personality. Example a
person in Ethiopia needs food but wants Burger. Wants are
shaped by one’s society and are described in terms of
objects that will satisfy those needs.
• Demand: when backed by buying power, wants become
demands. Given their wants and resources, people demand
products and services with benefits that add up to the most
value and satisfaction.
 What should entrepreneurs know about potential
customers?
1. Know the customers:
2. Know what different customer groups wants:
3. Know where the customer buys:
4. Know when the customer buys:
5. Know how the customer buys:
• Marketing plays a major role in achieving organization goal and
socio-economic system of a given country and further in the global
economy.
• marketing is consumer oriented, it has a positive impact on the
business firms.
• It enables the entrepreneurs to improve the quality of their goods and
services.
• Marketing helps in improving the standard of living of the people by
offering a wide variety of goods and services with freedom of choice,
and by treating the customer as the most important person.
• Marketing generates employment both in production and in
distribution areas.
• Customer Service Qualities:
Customer Service = Accountability + Delivery
• Good customer service means accountability, responsibility
and taking action to satisfy the customer.
• When you listen to the customer’s complaint you take
responsibility to solve the problem by:
1. Listen without interruption and with full attention.
2. Behave without aggression, and without arguing.
3. Do not extend excuses for the problem, and thank the customer
for drawing their attention to it and helping solve it.
4. Find out exactly what the customer needs you to do for them
5. Explain first what you can do, and then gently add what you
cannot do
6. Undertake immediately what was discussed
7. Check the result to make sure the customer is completely
satisfied
• General Skills Every Salesperson Should Have;
1. Listening Skills
2. Problem Solving Skills
3. Interpersonal Skills
4. Organization Skills
5. Self-Motivation Skills
6. Persuasion Skills
7. Customer Service Skills
8. Integrity
• Marketing Mix
• Marketing mix is the set of marketing tools that the firm uses to
pursue its marketing objectives in the target market.
• Marketing-Mix decisions must be made to influence the trade
channels as well as the final consumers.
1. Product
Product attributes - such as quality, features, style and design of
product
 A brand: is a name, term, sign, symbol, or design or a combination
of these, that identifies the maker or seller of a product or service.
 Packaging: involves designing and producing the container or
wrapper for a product.
 Labeling: Labels may range from simple tags attached to products
to complex graphics that are part of the package.
 Product support services: services that augment actual products.
2. Pricing
3.Place
4. Promotion
Financing an Enterprise
• Whether one is starting a new business or buying an
existing business, there is almost always the
problem of having enough capital to operate the
business. Starting a new business is an easy task.
• The entrepreneur can have a great and clear idea
with ability to translate it into a successful business.
• The initial money required to start the business is
referred to as start-up capital which consists of
initial investment capital and working capital.
• Investment capital refers to the fund to be spent on
the acquisition of equipment, furniture, building and
other properties and working capital is the money
needed to cover the operation of the business.
• The finance needs of a start-up should take
account of these key areas:
 Set-up costs (the costs that are incurred before the business
starts to trade)
 Starting investment in capacity (the fixed assets that the
business needs before it can begin to trade)
 Working capital (the stocks needed by the business –e.g. r
raw materials + allowance for amounts that will be owed by
customers once sales begin)
 Growth and development (e.g. extra investment in capacity)
 Basics of Business Plan
 A business plan is a written document prepared by the individual
entrepreneur or partners that describes the goals and objectives
of the business along with steps necessary to achieve those
goals.
 A Business Plan sets objectives, defines budgets, engages
partners, and anticipates problems before they occur.
Uses of the Business Plan
 First, it is a powerful sales document for raising money.
 A second major use of a business plan is that it serves as an
operational plan to direct entrepreneur’s operations. Generally,
the business plan benefits the internal and external users
 The plan helps the enterprise to develop a ―road map‖ to follow
in executing its strategies and plans.
 The plan introduces potential investors and other stakeholders
the business opportunity the firm is pursuing and how it plans to
pursue it.
 Employability skills
Definition of Employability Skill
• The ILO defines employability as relating to ―portable
competencies and qualifications that enhance an individual’s
capacity to make use of the education and training
opportunities available in order to secure and retain decent
work, to progress within the enterprise and between jobs, and
to cope with changing technology and labor market
conditions.
• Individuals are most employable when they have broad-based
education and training, basic and portable high-level skills,
including teamwork, problem solving, information and
communications technology and communication and language
skills..
• Employability skills are defined as skills required not only to
gain employment, but also to progress within an enterprise so
as to achieve one’s potential and contribute successfully to
enterprise strategic directions
 Core Employability Skills
• Core skills refer to skills knowledge and
competencies that enhance workers ability to
secure and retain a job, progress at work and
cope with changes.
• The core skills are:
1. Basic/foundation skills
2. Vocational/technical skills
3. Professional/personal
4. Core work skills
 Why Employability Skills are
Important?
• These set of "job-readiness" skills are, in essence,
behaviors that are necessary for every job and are
essential attitudes that allow you to grow in your
career and also efficiently let you:
Connect with co-workers
Solve problems
Be a part of and understand your role within the
team
Make responsible choices for your job and your
career
Be independent and take charge of your career
 • Elements of Employability Skills
1. Communication
2. Teamwork
3. Reliability
4. Problem-solving
5. Organization and planning
6. Learning
7. Initiative
8. Self-management
9. Leadership
10. Technology
Communication
Communication is one of the most important employability skills
because it is an essential part of almost any job. The communication
process involves five elements:
 Receiver,
 Sender,
 Message,
 Medium and Feedback.
•Thankyou::